What is Mirae Asset FANG Plus ETF?

Short Answer

The Mirae Asset NYSE FANG Plus ETF Fund is a good option for Investors who want foreign exposure. The Equity allocation is very concentrated to just 10 stocks which makes this ETF very volatile and risky. This ETF consists of the top 10 stocks in their respective sectors mostly TECH, like Amazon, Netflix. Facebook, etc. Hence Investors with high-risk tolerance and a long time period should consider this fund.

Detailed Answer

What is Mirae Asset?

Mirae Asset is an Asset management company headquartered in Seoul, South Korea. It offers various comprehensive financial services like asset management, wealth management, and other Mutual funds for investing. The Mirae Asset NYSE Fang is a new offering from the fund house that lets investors get exposure to the most valuable top 10 companies of the FANG category.

What is NYSE FANG?

"NYSE" stands for New York Stock Exchange and the term “FANG” is used to denote the top 4 Tech companies on the NYSE. These 4 companies are “Facebook”, “Amazon”, “Netflix” and “Google." These companies play a key role in most of the lives of people in some way or the other. The FANG index has gained popularity due to its extraordinary performance for a previous couple of quarters.

In the U.S, many stocks are listed on the NASDAQ, or the S&P Index buy only the best of the best companies are included in the FANG index. Therefore, one can say that the FANG stocks are somewhat in the “Elite Club” where the barrier for entry is very high. Due to these similar reasons, the valuation of these stocks is also high. This makes them an expensive option for “Value Investors” at the present valuation.

What is the Mirae Asset FANG Plus ETF?

With the rising popularity of the FANG stocks, Mirae Asset came up with a new NFO (New Fund Offering) under which all the FANG stocks and some additional market leaders were present.

This fund consists of all the sector leaders and is made up of 10 stocks. The weightage given to each of the stocks in this ETF is similar (10%). The constituents of this fund are-

1.Facebook

2.Amazon

3.Apple

4.Netflix

5.Google

6.Tesla’s

7.Twitter

8.NVIDIA

9.Alibaba’s

10.Baidu

All the 10 stocks are the market leaders in this segment and have equal weightage in this fund. The collective market cap of the following 10 companies is 7.7 Trillion dollars which are more than the total market cap of Nifty and Sensex put together.

This scheme offering by Mirae Asset will be an Open-End Fund which means there will be no cap on the maximum amount, this fund will accept. The NFO opens on 19th April and closes on the 3rd of May. The units will be allotted on the 10th of May. The minimum amount for investing in this NFO is Rs 5000 after which one can invest in the multiple of Rs 1/. An exit load of 0.50% will be charged if an investor sells them within 3 months.

This ETF will be listed on the NSE as well as BSE. After listing, one will be able to buy any quantity desired from the stock exchanges.

Who should invest in this ETF?

  1. Investors will a high-Risk Appetite should invest in this ETF. The risk is concentrated on a few stocks, therefore, the volatility can be high.
  1. Investors investing for a minimum time period of 3-5 years should look at this fund as the valuations of the FANG companies are rich and will require time to give good returns.
  1. Investors wanting to take exposure in abroad markets can invest in this fund as all the companies in this ETF are not listed in India. This will give exposure in abroad markets.

Conclusion

This fund is a good option for Investors who want foreign exposure in market-leading companies. The Equity allocation is very concentrated to just 10 stocks which makes this ETF very volatile and risky. Hence Investors with high-risk tolerance and a long time period should consider this fund.

Tagged With: Exchange Traded FundsEquity InvestingForeign ExposureFANGGlobal Stocks
Categories: Investment
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Discussion (2)

    It consists of the top performing stocks and also has higher risks. There is instability in the market but it can also help in earning higher returns. The investors who are willing to take risks and are interested to invest their stock for a longer period of time, then it is a very good option.

    Those who want a basket of all top-performing stocks in the US stock market can pick up this ETF. Yes, there is higher volatility, but then the returns are also equally higher. In the long run, you can have significant returns based on the performance of the stocks.

Related FAQs

Why are ETF or Exchange Traded Funds not popular in India?

Exchange traded fund is a freely marketable security which tracks a particular index, commodity, bonds or combination of assets. they aren't popular as there is no additional tax incentives, not enough liquidity, under performs most of the time, lack of choices, lack of institutional interest, costs are low but not enough and lack of awareness.

How are ETFs different from Mutual Funds?

ETFs (Exchange Traded Funds) and Mutual Funds are similar investment vehicles that provide the investors various features. Both have their benefits and shortcomings. ETFs are a good option for passive investors who want to invest in a particular Index or Sector without much rebalancing. On the other hand, Mutual Funds are a better option for active investors who are more active with their investments. One can switch between funds according to their current strategies.

What are the types of ETFs available for investment?

Exchange-Traded Funds or ETFs are an investment tool that tracks particular securities like Equity, Commodity, Bonds, etc. ETFs are available for many categories from which one can choose from. These are listed on Stock Exchanges (NSE & BSE) hence there is ample liquidity and one can easily buy and sell these at their desired price during market hours. Some ETFs available for investment in Indian markets are Equity ETFs, Debt ETFs, etc.

How to get exposure in U.S stocks?

Investing in abroad markets has become quite easy these days. One can get direct and indirect exposure into the U.S. market through various methods. Investing in foreign markets like the U.S provides many benefits like Diversification into the top companies of the world, Benefit of Currency Depreciation, etc. Apart from directly purchasing the stocks listed on the U.S. stock exchanges, there are some different methods as well. Know the best methods of getting exposure to the U.S. stock markets.

Are ETFs only for stocks?

ETFs are a financial instrument made to track an underlying asset and provide similar returns based on the performance of the underlying. ETFs are listed on stock exchanges which make it easier to buy and sell at desired prices. ETFs are not only limited to stocks but cover a wide range of investment avenues like Commodities, Bonds, etc.

Are market highs good to invest in Equity mutual funds?

Understanding the relative position of the market, the absolute values do not matter much. What matters is what is the earnings multiple, currently the market is trading at, popularly captured by a metric called P/E ( Price to earnings).

Can I trade or invest Rs 100 in the share market of India?

You can definitely trade or invest Rs 100 in Indian stock markets. There are no monetary requirements to enter the stock market hence you can buy any share that is trading under Rs 100. Apart from direct stock investing/ trading, there are some indirect ways to own shares over Rs 100. This can be done through Mutual Funds.

Which is better investing in equity, mutual funds, or keeping money in banks?

Equity and mutual funds are perfect if you want to invest in companies while seeing your money grow in a short period. Moreover, the chances of compounding your investments are higher. But the risk associated is equally greater considering the growth of companies and their performance in offering returns. But then keeping money in the bank is the safest way to keep your earnings. But then, due to inflation and low returns on interest, that value of the money kept might be cut down drastically.

How can NRIs from the United States invest in Mutual Funds in India?

NRIs living in the United States can invest in Indian Mutual Funds, but there are some hassles that have to be overcome. You will require an NRE, NRO, or FCRN account in order to convert the foreign currency into Indian rupees, post which you can complete the KYC and begin investing in Indian Mutual Funds.

How does an ETF work?

ETF is an investment instrument that tracks a group of securities from a particular asset class and performs according to it. It is managed by a Fund manager who makes sure that the ETF tracks the underlying asset accurately. ETFs are listed on the Stock Exchanges therefore one can buy & sell them within the market hours at their desired prices.